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Edited by Geoffrey Wood and Mehmet Demirbag
Chapter 4: Anglo-Saxon Capitalism in Crisis? Models of Liberal Capitalism and the Preconditions for Financial Stability
Sue Konzelmann and Marc Fovargue-Davies 4.1 INTRODUCTION The comparative capitalism literature sees national business systems as ‘configurations of institutions’, where different socio-economic institutions are interconnected in coherent, non-random ways (Jackson and Deeg 2008). From a comparative perspective it is argued that different countries cluster into a limited number of ‘models’ (Albert 1993; Whitley 2000; Hall and Soskice 2001; Amable 2003). Whilst different classifications exist, virtually all of them group the six Anglo-Saxon countries into the same category of market-based, shareholder-oriented or ‘liberal market economies’ (LMEs). The similarities in the institutional configuration of the Anglo-Saxon economies would lead us to predict similar conditions for doing business and comparable economic trajectories. However the 2008 financial crisis has demonstrated that the broad categorizations of models of capitalism may conceal important differences among these LMEs. Indeed, the Anglo-Saxon variety of capitalism groups some of the worst-hit countries with countries whose financial systems were remarkably stable during the crisis. As evident in the Financial Times ranking of the 50 largest banks by market capitalization (Financial Times 2009), between 1999 and 2009, American and British banks had lost considerable ground whilst those of the two other main Anglo-Saxon countries, Canada and Australia, clearly gained. This casts doubt on the conclusion that the 2008 crisis represents a crisis of Anglo-Saxon capitalism as such. This chapter examines the question of why the four main Anglo-Saxon countries experienced the 2008 financial crisis in such divergent ways, despite their similar cultural attributes, legal origins (La Porta et al. 1997) and...
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